Forecast: San Gabriel Valley’s economy gaining jobs

The San Gabriel Valley’s economy has shifted its focus from recession and recovery to “growth and new opportunities,” according to a report being released Tuesday.

The San Gabriel Valley Economic Partnership’s 2014 Economic Forecast and Regional Overview notes that employment in the region increased by about 2 percent last year and that the job count is expected to reach 674,900 in 2015, topping the pre-recession peak of 674,400 jobs in 2008.

Worker payrolls also rose in 2013 to an estimated $29.5 billion, a 3 percent gain over the previous year. The growth was fueled primarily by higher job counts as opposed to wage increases.

Total nonfarm payroll is expected to increase by 3.6 percent this year to $30.6 billion and by 4.5 percent in 2015 to nearly $32 billion.

“This is the best news I’ve seen since I started working for the partnership and I’m in my sixth year,” said Cynthia Kurtz, the partnership’s president and CEO. “I’m still very concerned about office space being soft here. But in every other sector we are improving, so that is very encouraging.”

The Valley’s office vacancy rate peaked at 18.4 percent in 2009 and has been trending downward in fits and starts since then. During the last quarter of 2013 it topped out at 16.2 percent. Nearly 897,000 square feet of office space were leased last year. That was double the activity in 2012 and the most new leasing since 2006.

The Valley’s strongest employment sector is health services. Driven by an aging population, retiring baby boomers and increased life expectancy, that sector rose to 115,200 jobs in 2013 compared with 70,656 in 2003, the report said.

The region’s second-largest industry is professional and business services, home to scientific research, management and technical consulting, legal services and architectural and engineering services, among others. That sector now employs 84,100 people, but that’s still down from 91,193 in 2003.

The report also points to a strengthening housing market.

By the end of 2013, median home prices in Southern California had risen on a year-over-year basis for 21 consecutive months. Foreclosures and short sales fell to their lowest levels since before the recession.

Other statistics reveal that local housing activity has risen sharply.

Permits for new construction in the San Gabriel Valley rose 76.3 percent last year to an estimated 1,529 units. The study notes, however, that job growth, income growth and household formation are not growing quickly enough to keep pace with the run-up in home prices.

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A tight inventory of unsold new homes and a low level of existing homes for sale have fueled price gains, the report said.

New home construction in 2013 was weighted more heavily toward multi-family units, with 875 units, or 57.2 percent of the mix, made up of multi-family homes, compared with 654 permits, or 42.8 percent, for single-family homes.

The strengthening housing market was evidenced over the weekend when a grand opening was held for Colorado Commons, a 68-unit, high-end condo complex in Old Town Monrovia.

The units — now priced from the mid-$300,000 to mid-$700,000 range — were initially designed as condos but later marketed as for-lease town houses when the recession hit and consumers had less cash to spare. The units have since been upgraded and are now available for purchase as condos.

“We have a lot of demand so I expect them to move pretty quickly,” said Johanna Gunther, vice president of sales for Polaris Pacific, which is marketing the units. “There has been a lot of interest. We had about 300 people on Saturday.”

The report also notes that the Valley’s manufacturing sector — once the region’s second-largest employer — has dropped to fifth place, with 31,667 jobs lost since 2002. But the region has benefitted from increases in international trade and tourism and the quality of its world-class schools and universities.